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  Korea Achieved Remarkable Trade Growth in Multilateralism for 50 Years after Joining GATT
  Poster : admin     Date : 17-04-17 19:03     Hit : 522    
-  Korea has made export-oriented economic development as the biggest beneficiary of multilateralism
 
Korea joined the GATT (General Agreement on Tariffs and Trade), which is based on the principle of most-favored nation, on April 14, 1967. Since then, Korea has enjoyed remarkable growth in trade volume, benefiting from the multilateral trade system for 50 years.
 
The Institute for International Trade (President, Shin Seung-kwan) of the Korea International Trade Association (KITA) stated in the report titled ‘Achievements and Challenges of 50 Years of Korea Trade After Joining GATT’ that Korea’s trade has dramatically grown over the past 50 years after joining the GATT as the country has received benefits in various fields, including tariff concessions as well as reduced non-tariff barriers. The report divided the fifty years after joining the GATT into 5 phases and analyzed the major contents and performance of each period.
 
In the first phase (1967~1972), Korean export items started to enjoy the most favored nation benefits as soon as the country join the GATT and Korea laid down the first stone for the export-oriented economic growth. During the first period, Korea’s average annual growth rate of trade was 25.8 percent, exceeding the growth rate of world trade (14.6%). In 1972, Korea ranked 44th in world export jumping from 66th in 1967.
 
The second phase (1973-1985) was between the Tokyo Round and the launch of the Uruguay Round. At the time of the Tokyo Round, Korea actively participated in negotiations on tariff concessions and rules.  The Tokyo Round allowed the tariff concessions on the total of 657 items. During this period, Korea achieved significant growth in trade volume, surpassing the average growth rate of the world trade. In 1985, Korea emerged as a major exporting country, ranking13th in global export. 
 
During the third phase (1986-2000), the Uruguay Round and the WTO were established. As a result of the Uruguay Round negotiations, the World Trade Organization (WTO), the first international organization, to control trade was launched in January, 1995. Under the WTO, various agreements such as the General Agreement on Trade in Services (GATS), the Information Technology Agreement (ITA) and the Government Procurement Agreement (GPA) have been concluded and Korea achieved success in service trade growth as well as export of IT products. In addition, Korea actively used dispute settlement procedures in order to secure Korea’s trade interests.
 
The fourth phase (2001~2007) is a meaningful period in terms of China’s entry into the WTO and opening of the free trade agreement era. Since China joined the WTO, Korea's trade with China has increased sharply and the trade surplus has continued until today. During the fourth phase, the world's attention was shifted from multilateralism to regionalism and FTA-oriented bilateralism as Doha Development Agenda (DDA) negotiations were not progressed further. Since the early 2000s, Korea has also taken simultaneous free trade agreement (FTA) strategy to promote aggressive trade liberalization.

 * To date, Korea has signed free trade agreements with 59 countries, of which 15 free trade pacts with 53 countries are in effect.
* The market size of Korea is 76.7% of the world based on the effectuated free trade agreements, and 78.0% based on the concluded free trade accords.
 
The fifth phase (2008 ~ present) is the time when many countries are experiencing the crisis of multilateral trade system after the global financial crisis. The DDA negotiations are still running on the spot, and trade is no longer able to drive economic growth as the world’s trade slows down. As a result, the confidence of the multilateral trading system has declined due to the strengthening of protectionism around the world. Korea's trade also decreased an annual average of 4.1% between 2012 and 2016. However, despite of the sluggish DDA negotiations, Korea has concluded deals in the areas of information technology, trade facilitation, and government procurement, and continues the multilateral trade negotiations. Therefore, Korea still has the opportunity to benefit from the multilateral trade system.
 
Currently, the multilateral trade system is facing great challenges starting from the DDA. Therefore, there is an increasing need for the multilateral trade system to actively cope with new challenges due to the progress of globalization and the development of advanced science and technology. As a result, the multilateral trade system remains a challenge to play an active role in response to the new economic system and the digital economy.
 
Lee Jun-won, a senior researcher at the Institute for International Trade, said "Korea has been the biggest beneficiary of the GATT for 50 years compared to any other countries. And the country has achieved remarkable economic growth through trade with other countries." He stressed In order to keep in check neo-protectionism, promote the world trade and maintain Korea’s trade profits in the future, it is important to lead the discussions on the continuous trade liberalization in multilateral trade negotiations.